[Sidenote:  European transactions.]

While the disorder of the American finances, the exhausted state of the country, and the debility of the government, determined Great Britain to persevere in offensive war against the United States, by keeping alive her hopes of conquest, Europe assumed an aspect not less formidable to the permanent grandeur of that nation, than hostile to its present views.  In the summer of 1780, Russia, Sweden, and Denmark, entered into the celebrated compact, which has been generally denominated “THE ARMED NEUTRALITY.”  Holland had also declared a determination to accede to the same confederacy; and it is not improbable that this measure contributed to the declaration of war which was made by Great Britain against that power towards the close of the present year.

The long friendship which had existed between the two nations was visibly weakened from the commencement of the American war.  Holland was peculiarly desirous of participating in that commerce which the independence of the United States would open to the world:  and, from the commencement of hostilities, her merchants, especially those of Amsterdam, watched the progress of the war with anxiety, and engaged in speculations which were profitable to themselves and beneficial to the United States.  The remonstrances made by the British minister at the Hague against this conduct, were answered in the most amicable manner by the government, but the practice of individuals continued the same.

When the war broke out between France and England, a number of Dutch vessels trading with France, laden with materials for shipbuilding, were seized, and carried into the ports of Great Britain, although the existing treaties between the two nations were understood to exclude those articles from the list of contraband of war.  The British cabinet justified these acts of violence, and persisted in refusing to permit naval stores to be carried to her enemy in neutral bottoms.  This refusal, however, was accompanied with friendly professions, with an offer to pay for the vessels and cargoes already seized, and with proposals to form new stipulations for the future regulation of that commerce.

The States General refused to enter into any negotiations for the modification of subsisting treaties; and the merchants of all the great trading towns, especially those of Amsterdam, expressed the utmost indignation at the injuries they had sustained.  In consequence of this conduct, the British government required those succours which were stipulated in ancient treaties, and insisted that the casus foederis had now occurred.  Advantage was taken of the refusal of the States General to comply with this demand, to declare the treaties between the two nations at an end.

The temper produced by this state of things, inclined Holland to enter into the treaty for an armed neutrality; and, in November, the Dutch government acceded to it.  Some unknown causes prevented the actual signature of the treaty on the part of the States General, until a circumstance occurred which was used for the purpose of placing them in a situation not to avail themselves of the aid stipulated by that confederacy to its members.